Case Study 7: Mexico Flashcards
Why is the Progresa/Oportunidades program considered more efficient than previous poverty alleviation programs in Mexico, and what specific factors contribute to this efficiency?
The Progresa/Oportunidades program is considered more effective because of their
integrated approach where they provide subsidies on education, health, and nutrition. Parents get paid for sending their children to school and health checkups which significantly increase school attendance, their overall well-being, and decrease rate of child labor. Investing in children provides a long-term impact which helps break the cycle of poverty. Also, Oportunidades are also very cost effective. Fully 82% goes to the direct cash transfers, and the remaining 12% goes to nutritional supplements and other in-kind transfers. In addition, this program decreased child labor by 15% and reduced high school dropout rates by 20%.
- It streamlined cash transfers through bank cards, reducing the risk of corruption and ensuring that benefits reached the most vulnerable households.
- The program targeted measurable outcomes, such as increased school attendance, improved health, and reduced child labor.
- It was also rigorously evaluated through randomized trials, making it one of the most well-tested poverty alleviation programs, with clear evidence of its effectiveness.
- Progresa/Oportunidades replaced inefficient food subsidy programs that often failed to reach the poorest families, especially in rural areas.
Why are the payments under the Progresa/Oportunidades program higher for students in higher grades, especially for girls, and what are the long-term societal benefits of this approach?
Payments under P/O program are higher for students in higher grades especially for girls
because older children are more likely to drop out of school due to economic pressures and the tradeoff of staying in school increases with age. “Girls receive slightly higher payments because they are more at risk of dropping out, while the social benefits of keeping girls in school are well known from development economics research to be very high” improved child health, reduced fertility rates and greater economic empowerment. Also its method of cash transfer may improve inefficiency bureaucratic processes within Progresa programs. In long term, this helps break the cycle of poverty by increasing educational attainment, reducing child labor, and making a more productive workforce which contributes to both economic growth and development.
How does the Progresa/Oportunidades program address the trade-off parents face
between sending their children to school and needing them to work, and what impact does this have on family income and long-term poverty reduction?
The program is effective in addressing the trade-off parents face between sending their children to school and needing them to work. In the case study, we see that conditional cash transfers allow families to be financially supported as long as their children are attending school. This is removing the pressure of child labor. With this program in place, there is a larger enrollment in schools and there is an increase in future earning potential of these children. They are more likely to escape poverty as adults with this crucial education. Family income can be improved, but mainly short term as the program does reduce the strain within the household at the time. However, as a whole, gaining education and less financial stress allows for reduction in long-term poverty and increasing economic stability. This benefits not only the family but society in general.
